"We've heard from many of our customers that not having an IaaS was a barrier to adopting many of our other cloud services," said Urs HAPlzle, Google senior vice president of technical infrastructure.

The service will be available as a limited preview, with access available only through Google's salesforce. The company did not offer an estimate of when the service would be generally available.

Google will demonstrate the new service during the Google I/O developers conference this week in San Francisco. In a keynote talk Thursday, HAPlzle plans to show the service running a single application across 600,000 processor cores. "This will showcase we have the scalability to run very large applications at very high performance," HAPlzle said.

By entering the IaaS market, Google is following Microsoft, which also recently added Linux IaaS services to its Windows Azure PaaS (platform as a service).

The service will offer the ability to run Linux virtual machines (VMs) based on either the Ubuntu 12.04 or the CentOS 6.2 Linux distributions. The distributions run over the KVM (Kernel-based Virtual Machine) hypervisor. The service also comes with storage and networking capabilities. To offer additional management functionality with the service, Google has also partnered with a number of software vendors, including Puppet Labs, RightScale and Opscode.

The company will initially market the service to those who will need 100 or more VMs. The ideal workload would be more compute-intensive rather than I/O-intensive. Administrators can add more cores to an application while it is still running.

Google has made it easy to combine GCE with other Google cloud services, notably Google App Engine (GAE). "You will be able to combine GAE, BigQuery and GCE to form larger applications, and we expect many users to do that," HAPlzle said.

VMs will be available with either one, two, four or eight cores, with each core allotted 3.75GB of memory. Running a standard single core will cost US$0.145 per hour, with additional costs for networking and storage.

The company has achieved pretty good adoption of its Google App Engine PaaS offering thus far. Launched in 2008, the service currently hosts 1 million active applications. Collectively the services get about 7.5 billion Web requests per day. The Cloud SQL executes 50 million queries per day and the datastore conducts 2 trillion operations per month.